Carbon accounting in Bio-CCUS supply chains – identifying key issues for science and policy IEA Bioenergy Task 45 IEA Bioenergy Task 40 February 2022 xxxx: xx IEA Bioenergy: Task XX Month Year xxxx: xx Carbon accounting across Bio-CCUS supply chains – identifying key issues for science and policy By: Olle Olsson1, Nabil Abdalla2, Silvana Bürck2 & Horst Fehrenbach2 1 2 SEI (Stockholm Environment Institute) ifeu (The Institute for Energy and Environmental Research) IEA Bioenergy: Task 45 & Task 40 February 2022 Title of publication Subtitle of publication Authors and / or acknowledgements here Copyright © 2022 IEA Bioenergy. All rights Reserved Edited by ISBN 979-12-80907-05-9 Published by IEA Bioenergy The IEA Bioenergy Technology Collaboration Programme (TCP) is organised under the auspices of the International Energy Agency (IEA) but is functionally and legally autonomous. Views, findings and publications of the IEA Bioenergy TCP do not necessarily represent the views or policies of the IEA Secretariat or its individual member countries Summary Having just a few years ago been a topic primarily featured in future-oriented energy system and climate models, Bio-CCUS (bioenergy with carbon capture and utilization or storage), is increasingly becoming a matter of on-the-ground deployment. However, while the technological aspects of capture, utilization and storage of biogenic CO2 are rather wellunderstood and have in many cases already been used in commercial settings, there are still substantial gaps on the policy and governance side. Particularly important aspects here are carbon accounting, how to quantify the climate impact of Bio-CCUS systems and how to include these elements in policy frameworks. In this report, we review key issues to focus on and discuss different options for how these could be addressed from a scientific as well as from a policy perspective. Importantly though, while upstream feedstock supply chains are a key factor in total life cycle emissions accounting, there is already a large literature on carbon accounting in biomass supply chains in general. As we do not expect feedstock supply chains for bio-CCUS differ from biomass supply chains in general, this report only briefly touches upon upstream aspects. While it is common for CCU and CCS systems – be they based on biogenic or fossil CO2 - to be jointly discussed as (bio-) CCUS, there are important differences between the two. This pertains to post-capture CO2 accounting, as well as policy systems and business models. For Bio-CCS, analysis of post-capture CO2 flows should be fairly straightforward, as the CO2 is to be permanently stored and immobilized in geological formations. This is assuming avoidance of e.g., leakages in transport and storage as well as the minimization of use of fossil energy for CO2 transport. The major policy challenge around Bio-CCS concerns how to design policy frameworks to incentivize carbon dioxide removal (CDR), also referred to as negative emissions. A key question is if, or to what extent, policy frameworks for carbon dioxide removal should be integrated into existing systems for emission reductions – such as the EU emissions trading system – or whether there should be specific ring-fenced systems for CDR. Analysis of the post-capture CO2 flows for Bio-CCU is more complicated than for Bio-CCS. CO2 can be utilized for a wide range of purposes, including as feedstock for many different products, which means that there are great many cases to analyze to understand the net climate impact in detail. This concerns aspects such as the process efficiency, the kinds of energy used and what existing product the Bio-CCU product could be replacing. In addition, a very important issue that has thus far not received sufficient attention is how to factor in the variation in CO2 storage permanence between different CCU products, i.e., for how long time CO2 used in a product stays away from the atmosphere. This can vary from less than a year for a fuel or a chemical, via decades for non-packaging plastics and up to possibly centuries in the case of some building materials. Given the growing interest in (bio-)CCU projects, it is essential to find approaches to a) quantify how the climate impact of CCU products depends on CO2 storage permanence and b) how these aspects can be integrated into policy frameworks. To this end, we suggest to draw inspiration from similar frameworks, such as the UNFCCC accounting framework